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E-mail marketing spending to reach $1.10 billion by 2010

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Spending on e-mail marketing will grow at a compound annual growth rate of 4.5% over the next five years, from $883 million in 2005 to $1.10 billion in 2010, according to a new report from JupiterResearch.

The report, titled “U.S. E-mail Marketing Forecast: 2005-2010,” found that spending on retention e-mail will make up the largest share of e-mail marketing, growing from $457 million in 2005 to $577 million in 2010.

Spending on acquisition e-mail will increase from $426 million in 2005 to $518 million in 2010, the report found.

Within acquisition e-mail, the highest growth will come from sponsored e-mail, such as ad-supported newsletters, increasing from $232 million in 2005 to $272 million in 2010.

Other forms of acquisition e-mail include co-registration, which will grow from $117 million in 2005 to $163 million in 2010, and e-mail append, which will grow from $78 million in 2005 to $82 million in 2010.

The highest growth in e-mail marketing spending will come from transactional e-mail, which will increase from $2 million in 2005 to $7 million in 2010, a 37% compound annual growth rate.

JupiterResearch also forecast a decrease in the average number of spam e-mails received annually by consumers, from 3,253 in 2005 to 1,640 in 2010. Jupiter attributed the decrease in spam to improved filtering technologies being developed by Internet service providers.

In a separate report, titled “Marketing to SMBs via E-mail,” Jupiter projects that b-to-b marketers will increase e-mail marketing spending from $183 million in 2005 to $206 million in 2010, at a compound annual growth rate of 2.4%.

“Growth will be healthy in the b-to-b sector, but it won’t be as significant as in the b-to-c sector,” said David Daniels, lead analyst on the report.

He said the most significant factor in the difference between spending for b-to-b and b-to-c marketers is the volume of e-mail delivered. B-to-b marketers send an average of 698,000 e-mails a month, while b-to-c marketers send an average of 3.6 million e-mails a month.

The report also looked at small-business users’ engagement with e-mail marketing. According to the report, 54% of decision-makers at SMBs had signed up to receive e-mail newsletters over the past year; 39% had opted out of e-mail newsletters; 38% had signed up to receive promotional or marketing e-mails; 36% had opted out of promotional or marketing e-mails; 29% had clicked on an e-mail marketing offer; and 17% had purchased from an e-mail marketing offer.

The report was based on interviews with 260 IT decision-makers at small businesses.

Daniels said one important consideration for b-to-b marketers trying to reach SMB users through e-mail is ISP delivery issues. “B-to-b e-mail isn’t only about reaching people at their place of work,” he said.

The report found that 70% of e-mail accounts used by self-employed businesspeople are consumer-oriented, and 79% of e-mail accounts used by small business users are consumer-oriented.

Therefore, “For b-to-b marketers, it requires them to be focused on the types of things consumer marketers would be focused on,” Daniels said.

He recommended that b-to-b marketers trying to reach small business users consider using delivery audit providers that focus on consumer issues, such as Habeas, Lyris Technologies, Pivotal Veracity and Return Path.

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